Hnak Itzek manufactures and sells homemade wine, and he wants to develop a stand

Question

Hnak Itzek manufactures and sells homemade wine, and he wants to develop a standard cost per gallon. The following are required for production of a 50-gallon batch.

Hank estimates that 3% of the grape concentrate is wasted, 10% of the sugar is lost, and 21% of the lemons cannot be used.

Compute the standard cost of the ingredients for one gallon of wine. (Round intermediate calculations and final answer to 2 decimal places, e.g. 1.25.)

4,000 ounces of grape concentrate at $0.04 per ounce 83 pounds of granulated sugar at $0.55 per pound 88 lemons at $0.75 each 150 yeast tablets at $0.21 each 150 nutrient tablets at $0.13 each 1,500 ounces of water at $0.005 per ounce Hnak Itzek manufactures and sells homemade wine, and he wants to develop a standard cost per gallon. The following are required for production of a 50-gallon batch. Hank estimates that 3% of the grape concentrate is wasted, 10% of the sugar is lost, and 21% of the lemons cannot be used. Compute the standard cost of the ingredients for one gallon of wine. (Round intermediate calculations and final answer to 2 decimal places, e.g. 1.25.)

Explanation / Answer

4000 ounces of grape concentrate at $0.04 per ounce = $160
Including wasted juice = 160 / 0.97= $164.94
83 pounds of granulated sugar at $0.55 per pound = $45.65
Including lost sugar = 45.65/0.90 = $50.72
88lemons at $0.75 each = $66
Including wasted lemons = 66 / 0.79 = $83.54
150 yeast tablets at $0.21 each = 31.5
150 nutrient tablets at $0.13 each = $19.5
1500 ounces of water at $0.005 per ounce = $7.5

Total cost per 90 gallon batch = $357.7
357.7 / $50 = $7.15 per gallon

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